Increase in electricity prices | Companies in shock

While they expected the rate increase to be limited to 3% for all Hydro-Québec customers as promised by the government, businesses, SMEs and large companies must cash in on a record increase in the cost of electricity, the highest for at least 15 years. And they are in shock.

From 1^er April 2023, businesses and small businesses will see their electricity bill increase by 6.4%, while the preferential rate that applies to large businesses (Rate L) will increase by 4.2%, according to figures provided by the Ministry of Economy. Only the increase in the residential rate will be limited to 3%.

“A 6.4% increase, which is added to all the other cost increases, will make life very difficult for small businesses,” laments François Vincent, vice-president for Quebec of the Canadian Federation of Business. independent.

The CFIB estimates that the bill for SMEs will rise by 250 million, twice as much as if the increase had been limited to 3%. It will particularly hurt retail businesses and restaurants, and all the SMEs that have been most affected by the pandemic, specifies François Vincent.

Large companies, for their part, are taking a terrible shock, says their spokesperson Jocelyn Allard, president of the Association of Industrial Electricity Consumers.

For many of these companies, electricity accounts for 50% or more of their production costs. They had included in their budget planning a price increase of less than 3%, not 4.2%.

The government’s decision to limit the increase in Hydro-Quebec’s rates to 3% for residential customers only is not even good news for consumers, believes Option consommateurs.

“Companies will include the increase in the cost of electricity in the price of their products, explains Sylvie de Bellefeuille, budget and legal advisor for the organization. Inevitably, people will pay more. »

According to her, the government’s decision is “senseless” because it will not protect consumers against rising prices, on the contrary it will contribute to inflation.

“We don’t understand,” adds François Vincent, of the CFIB. “The government announces an anti-inflation shield for the population, but not for businesses. It is sure that it will have an impact on the prices”, he says.

Nearly three-quarters of Quebec businesses in the CFIB indicated in a survey that they would pass on the increase in their costs in the price of their products and services, recalls François Vincent. “For the others, I am thinking for example of small bookstores, it will be even harder. »

The predictability?

In a bill that died on the order paper before the National Assembly adjourned before the elections, the outgoing government announced that all categories of electricity tariffs would be limited to a 3% increase.

The bill that has just been reintroduced when parliamentary work resumes now only concerns residential rates, hence the unpleasant surprise for businesses.

Responsibility for setting electricity rates was removed from the Régie de l’énergie in 2019, as Bill 34 passed under government gag order decreed that rates would henceforth increase at the rate of inflation for Quebec, which is currently 6.4%.

This new method of setting electricity rates, unanimously criticized by businesses, consumers and energy specialists, had the advantage, according to the government, of offering more “predictability” on the cost of electricity, especially for companies that need to plan their decisions for the long term.

The least we can say is that “predictability has taken over”, laments the spokesperson for industrial consumers, for whom the increase planned for 1^er next April is double what they expected.

Nor does the increase in business rates have anything to do with the needs of Hydro-Québec, on which the Régie de l’énergie’s rate decision was based before Bill 34. “Given the financial situation of “Hydro-Quebec, which is making record profits this year, the rates limited to 3%, it is still too much, in our opinion,” observes the spokesperson for Option consommateurs.

By betting that the inflation rate is immutable, the government “lacked vision, according to Sylvie De Bellefeuille. Unfortunately, all we can say today is: we told you so”.